What to Expect from AT&T’s 3Q17 Earnings

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Part 2
What to Expect from AT&T’s 3Q17 Earnings PART 2 OF 9

AT&T and Expected Revenue Growth for 3Q17

AT&T’s revenue in 3Q17

In the previous part of this series, we looked at Wall Street analysts’ expectations for AT&T’s (T) 3Q17 earnings. Now let’s take a look at its anticipated total revenue. Wall Street analysts are expecting AT&T’s total revenue to fall ~1.5% YoY (year-over-year) to ~$40.3 billion. The company’s management is no longer providing a total revenue forecast for 2017 due to the unpredictability of wireless handset sales.

AT&amp;T and Expected Revenue Growth for 3Q17

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In 2Q17, AT&T reported total revenue of $39.8 billion, a 1.7% fall YoY. However, the telecom (telecommunications) company expects that the proposed acquisition of Time Warner (TWX) could boost its revenue and earnings profile as well as diversify its revenue mix.

AT&T’s revenue growth by segments

Revenue from AT&T’s Entertainment Group segment fell from ~$12.71 billion in 2Q16 to ~$12.68 billion in 2Q17. According to the company, this segment saw growing competitive pressure and remained flat in 2Q17 compared to 2Q16, with gains in video and IP (Internet Protocol) broadband services.

For its International segment, AT&T reported revenue of ~$2.0 billion in 2Q17. The revenue from DirecTV’s Latin American segment was ~$1.4 billion in 2Q17. The Mexican wireless component made up ~$0.70 billion of the segment’s revenues.

Revenue from the Business Solutions segment fell ~2.7% YoY in 2Q17 to ~$17.1 billion. The fall was mainly due to a reduction in legacy wireline services.

Revenue for the Consumer Mobility segment fell ~4.8% YoY to ~$7.8 billion in 2Q17, reflecting lower postpaid service revenues, mainly due to the migration of customers to business plans.

Peer comparison of total revenue in 2Q17

By comparison, in 2Q17, Verizon’s (VZ) consolidated revenue rose ~0.10% YoY to $30.5 billion. T-Mobile’s (TMUS) total revenue rose ~10.0% YoY in 2Q17 to ~$10.2 billion. In fiscal 1Q17 (quarter ending June 2017), Sprint’s (S) total revenue rose ~1.8% YoY to ~$8.2 billion.

In the next part, let’s see what the expectations are for AT&T’s combined domestic wireless operations EBITDA (earnings before interest, tax, depreciation, and amortization) in 3Q17.


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